Deacons issues profit warning as revenue dips
Some merchandise available at a Deacons shop. Photo/FILE
What you need to know:
- The apparels dealer, recorded Sh10.4 million in profits in the period ending June 30, compared to Sh44.6 million the company posted in a similar period last year.
- The firm blamed the decline in profits on high interest and inflation rates, which eroded purchasing power, further noting that full-year earnings could decline by 25 per cent.
- The announcement comes two weeks after the company said it was finalising the terms of engagement with Woolworths of South Africa in a joint venture to retail in the Kenyan market.
Clothes retailer, Deacons, has announced a profit warning for its full-year results after realising a 77 per cent decline in after-tax profits in first six months this year.
The apparels dealer, recorded Sh10.4 million in profits in the period ending June 30, compared to Sh44.6 million the company posted in a similar period last year.
The firm blamed the decline in profits on high interest and inflation rates, which eroded purchasing power, further noting that full-year earnings could decline by 25 per cent.
Capital expenditure
“Anticipated drop in full-year earnings is, in part, as a result of high interest costs which were incurred over capital expenditure required for new stores from which the revenue return has not been realised in the first half of FY2012,” the retailer said in a statement signed by its company secretary John Maonga.
The clothes chain opened five stores in the second half of this year, bringing the total number of stores to the country to 31 across the region.
The announcement comes two weeks after the company said it was finalising the terms of engagement with Woolworths of South Africa in a joint venture to retail in the Kenyan market.
